When Management Companies Merge
With consolidation currently a major trend in the hotel industry, it’s no surprise that management companies should be some of the players to join forces.
Among hotel branding companies, the big news is still Marriott International’s pending months-old $12.4 billion acquisition of Starwood Hotels & Resorts Worldwide, a deal that will create the world’s largest hotel company with more than 30 brands and 1.1 million beds. Analysts expect that deal to close in a matter of weeks. Among online travel agencies, which many travelers use to book hotels, Expedia, Inc., has been on a tear, acquiring both Orbitz and Travelocity in the past 18 months.
Likewise, planners will be interested to note that two of the U.S.’s leading hotel operators—Benchmark Resorts & Hotels and Gemstone Hotels & Resorts—agreed to merge this month (July), significantly increasing their market share of properties under management. No name for the new entity has been announced, but together a combined Benchmark-Gemstone will manage 58 resorts, hotels and conference centers in 18 states (not to mention Japan and the Caribbean island of Curacao).
The portfolio focuses on luxury and upper-upscale independent properties and booking group business is a major priority. On the plus side, the combined entity will have multiple properties in popular group destinations such as California, Florida, Massachusetts and Arizona, among others, allowing planners more choices in those markets.
On the individual property level, planners may already have a relationship with Maison 140 in Beverly Hills; now the same management company will operate Hotel Zelos in San Francisco. Similarly, planners who have held events at the Ames Boston Hotel can now book Boston’s Copley Square Hotel, knowing the same service standards and management philosophy will be in place.
At the same time, these are all independent hotels, so planners can be assured that their attendees’ experience will hardly be cookie cutter.
Other synergies come to mind. For planners faced with an overflow situation at the Ames, for example, can now confidently walk attendees to the Copley Square, knowing they’ll be well looked after. In the same way, attendees at an event at Hotel Zelos interested in booking a pre- or post-stay in another luxury California destination now have Maison 140 to consider.
Granted, any industry consolidation ultimately means less competition overall. But when it comes to RFPs, of course, it certainly can’t hurt planners’ negotiating position when they’re considering booking multiple properties all under a single management company’s umbrella.